Books & Supplies
Anything that is absolutely mandatory for your coursework is considered a qualified expense. This includes things such as textbooks, lab materials, safety equipment, ect.
Anything that is not required or listed as a requirement on a syllabus cannot be claimed as an eligible expense.
For example, if you’re taking a psychology class and you decide to go purchase a biography on Sigmund Freud to continue learning about him for your own personal interest, then you will not be able to use your 529 plan to cover it.
What About a Computer?
A hot topic when considering supplies is what about a computer. YES, computers are considered a qualified expense! Good news, right. And, any related technology or service expense including internet access fees and peripheral equipment is considered to be qualified too. For a more itemized list, read the second bullet point below.
Some of the Finer Points
- As long as the materials are mandatory or required, it doesn’t matter where they are purchased from
- Peripheral equipment for your computer includes things like, but are not limited to: software, printer, mouse, and speakers. These items ARE ELIGIBLE as long as they are primarily used by the beneficiary while they’re enrolled in an eligible institution.
- Computer software that has nothing to do with your studies does not could as a qualified expense. This means no games, sports software, or apps pertaining to a hobby.
As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. The tax implications can vary significantly from state to state.